Employer refusing to pay childcare vouchers during SMP

[EllasMummy09]

Hi

I hope someone can help me..

If I understand correctly the law regarding Maternity leave benefits changed in 2008. (Amendments made in 2008 to the Sex Discrimination Act (SDA). One of the changes being that the value of the vouchers can only be deducted from my maternity pay providing the actual amount of pay does not fall below statutory maternity pay. Which would mean that my employer need to pay the vouchers while I'm receiving only SMP or have no pay at all.

Is this right?

I have asked about this and my employer is refusing to make any contribution to towards Child Care Vouchers whilst I'm on maternity leave. Has anyone been in this situation before and what was the outcome?

Thanks!

mysecretumbrella.. exactly "what" do you think small firms have in place to cover this sort of thing? A bank account with "free spare money " in it?

It's not grabby at all. Is it grabby of pregnant women to wish to accrue holiday and pension and length of service whilst on maternity leave? What is grabby is companies deducting the value of vouchers from SMP - which they get back from HMRC! I sincerely hope the companies doing that get thoroughly spanked.

Mysecretumbrella - yes I have spoken to my HR dept and they are speaking to payroll. They say they will sort it out but I'm wondering how long it will take them.

I think it's a very interesting point. It's almost an accident of law that childcare vouchers must be paid during maternity leave - a coinciding of HMRC rules that salary sacrifice can't be deducted from SMP and discrimination legislation that benefits must be provided throughout maternity leave, resulting in (for example) a woman who opts to reduce salary in favour of vouchers being much better off during maternity leave than a woman who retains her full salary.

In terms of holiday, the whole purpose of holiday is to ensure employees get a break from working. Holiday is accrued directly in relation to how long someone has been working, to ensure that during a working year, employees get a minimum of 5.6 weeks rest.

A woman who is taking a year off work for maternity leave isn't working so on that basis doesn't need holiday. But because of discrimination legislation she accrues it anyway, meaning effectively she gets more of a break from work when she gets back than her colleagues.

I am not at all saying that women who want and claim their full benefits during maternity leave are grabby. Women still suffer plenty of detriment as a result of taking maternity leave in terms of delays to their careers, discriminatory attitude from colleagues, all sorts.

But I can certainly understand the point of view of small business owners that it's gone a bit too far, and would also point out that most small business owners who have put childcare vouchers in place for their staff have done so to be good employers and without knowing that it would cost them up to £243 x 12 in the event of an employee going on maternity leave.

Small businesses can claim the cost of SMP plus a bit extra back from HMRC if someone goes on maternity leave, but because of having to supply a full year's holiday and benefits to both the maternity leaver and her cover, it can cost small businesses an awful lot.

Yes ideally all businesses should have funds in place for such eventualities, but in reality many small businesses are running fairly close to the bone and can't do that.

As I say, I do not at all think women going on maternity leave getting their contractual benefits are grabby. But I think sometimes the perfectly valid point of view that having to provide benefits for the year is a step too far is dismissed out of hand as being shocking and discriminatory.

flowery you put some of my point better than I did!

northern lurker - you missed my point.. of course it's not grabby that a long standing employee is entitled to retain her benefits during maternity leave.. (although to be fair, I don't think women should accrue holiday whilst on maternity leave - this affects small businesses significantly).

I just think that ChildCare vouchers were set up as a benefit for ADMIN purposes and this loophole is being exploited by some.

The more it is exploited (as some posters on here expressed a wish to be able to do - ie "up their contribution level" prior to maternity leave - which imo is grabby) the more employers will be unwilling to offer it to geniune takers.

If I were a small business, I would no longer offer vouchers for specifically this reason.

Why should (we) women expect our childcare to still be paid directly out of our employer's pocket's whilst on maternity leave?

Can I hijack and ask another question that comes to mind?

In the (hypothetical) situation where I was, say, 30 weeks pregnant at the end of a fixed term contract, and had been claiming vouchers, would I get the vouchers along with SMP from my ex-employer? I wouldn't be on maternity leave, per se, would I?

No you don't get benefits if you are no longer employed Spindelina, so just as you wouldn't expect to get holiday pay or keep a company car from an employer you no longer work for, you also don't continue to get vouchers.

Thanks flowery. I thought that would be the case, but good to check.

Hi flowery, so my employer has now coming back saying that his interpretation of the HMRC document is that the continuation of the "benefits" (childcare vouchers) only applies if those benefits were in place during the set period used to calculate the AWE (average weekly earnings). In my case this period was roughly Oct-Dec 2011 and my childcare vouchers weren't set up until just after this (by total coincidence - I took a while to request them and the company were then slow in processing my request). However my reading of the HMRC document is that the calculation of SMP from the AWE is completely separate to the issue of continuing benefits. Any thoughts??

Having read the references to grabbiness above I just wanted to clarify why employers offer this-it is because they are financially incentivised to do so.

The employer saves the employer's NI contribution on the total value of the salary sacrificed. So if you purchase the full £243 per month of child care vouchers and you earn over £20000 pa the employer saves £402.41 every year you contribute (from April 2011-£373.25 for every year prior to that). In my case I have been in the scheme for 4 years. The employer has already saved £1320.96. In addition my husband is in the same scheme with the same employer. The employer has saved over £1522.16 on NI contributions for him. Our youngest child is 10 months. I anticipate returning to work when he is one and continuing to remain in this scheme for another 10 years (the vouchers are valid until the child is 15 years and can be accrued). Over the total period that my husband and I remain in the scheme my employer will save £10891.32 in NI contributions in total.

I therefore feel very angry that my employer has refused to pay out my child care vouchers during the latter part of my maternity leave (a cost to them of £1458). The maternity benefits they offer are minimal and I have worked for them for a very long time and have given exemplary service.

Whilst in my case the benefit to the employer is particularly great I would be very surprised if there are many, if any, employers out of pocket as a result of operating this scheme. The change to the law which led to employers having to pay vouchers during additional maternity leave received a lot of publicity in 2008 due to the adverse impact on employers but employers have not backed out of the scheme because they actually benefit from it! If they did not they would have done so I am sure.

headingsouth.. I would again reiterate my point is toward the 'grabbiness' exhibited by people employed by small businesses and those barely employed before falling pregnant.
.
Small businesses, do not, believe me, rake it on off the back of administering these schemes.

Can I hijack too? I've asked to go on the child care voucher scheme, and my employer has said I can only claim £217 per month instead of £243. Is this right or is his info out of date?

Thanks.

I too am trying to research info on whether I have to join my voucher scheme during the 17-25 week reference period to be eligible to claim childcare vouchers during my MAT leave with DC number 2 (currently 17 weeks PG). I stopped them when DC number 1 started school and now want to start again to save up for childcare costs in prep for return from MAT leave particularly as DH has changed jobs since DC 1 and doesn't have a voucher scheme with new employer... Any guidance or sign posting on this point greatly appreciated...

Sorry, just bumping in case anyone can shed any light on this specific question - do you have to have been receiving childcare vouchers during the 17-25 wk qualifying period in order to be entitled to them during mat leave?

I'm waiting for a response from my employer... I've asked if we can seek some advice from elsewhere as we disagree on this point... but am happy to be told if I'm in the wrong!

The week 17-25 period is only about SMP, it's nothing to do with benefits - no idea where your employer got that idea...?! The whole point is that benefits continue as if you were still at work. If you changed role at week 26 to one that included a company car, you wouldn't expect to have to give it up. It's just the same for childcare vouchers.

businesslink

My work are offering an interest free loan once I pass 18 weeks and drop on to smp, just psyching myself up for that battle (local government!)

Thanks Flowery. That is what I thought too so good to hear I'd interpreted things correctly. I agree, I'm not sure where my HR "department" (one person!) got that idea - problem is that at the moment it's his interpretation against mine. That link you gave is useful though. I may also try the ACAS helpline - what I really need is something definitive in writing (even though I agree it is pretty clear!). Thanks again for your help on this.

I am delighted to report that my employer has accepted my request for fully paid child care vouchers whilst on ML- Thx Flowery for your help. Having worked 8 long years for this business with no benefits except holiday, I felt that I really was entitled to this. As a working mother going from FT to PT work you are still required to put in extra hours and getting paid less to often work similar hours to before. Its the very least my employer could do for me.

Hi,

I'm not normally on mumsnet, but have read this thread over the past month or 2 & found it useful. I'd really appreciate some advice.

Here's my scenario:

I work for a large UK company.
I receive SMP only, no enhanced maternity pay.
I buy £234 childcare vouchers each month using something our company calls 'salary reduction'.
My mat pay (the 6 weeks at 90%) will be reduced as I am not able to opt out of the voucher scheme for the 'qualifying weeks' used to calculate this pay.

My query is around vouchers when I am receiving SMP.
Our intranet clearly states that I do not receive childcare vouchers when on maternity leave. Based on everything I have read, I disagreed so wrote to pay services.

Their reply was:

"XXXX (company name) is aware of the HMRC guidance to which you refer in this letter. This guidance appears to adopt a general view that the provision ofchildcare vouchers amounts to the provision of a non-cash benefit.

However, the terms and conditions of XXX (company name) Taxfree, under which childcare vouchers can be made to XXX employees are clearly about renumeration. Where terms and conditions are about renumeration, they do not have to be provided during maternity leave."

Now, this is a very large UK company. I can't imagine that
a) I'm the only person to question this
b) They haven't looked into this when setting up the scheme/when the legislation changed.

What I'm struggling with is how this is about 'renumeration'? I lose salary each month to 'buy' these vouchers, they are not free.
Isn't this exactly the same as salary sacrifice?

Any advice would be appreciated! I'm due on maternity leave mid August, and not sure if I can handle the stress of having to go down the grieveance or legal route.

Thanks in advance...

Can I just bump this very interesting thread?

I understand that companies need to pay the childcare vouchers during periods of SMP. Would this also include the first 6 weeks which are paid at 90% pay (Or only the periods which are at approx £125 a week)? The reason I ask is that I get SMP for the first 6 weeks (at 90%) then move onto a (great) company scheme rather than SMP.

lilybur1 yes salary 'reduction' is the same as salary sacrifice. You have less salary as you receive a benefit instead. Your employer are right that you are not entitled to remuneration during maternity leave, however remuneration is your salary, and bonus if you get one. Childcare vouchers are a non cash benefit and as such are payable throughout.

PieMistress Employers have to provide childcare vouchers throughout maternity leave, paid and unpaid portion. They can make deductions from anything they provide over and above SMP, but not from SMP itself, so in your case if you are only getting SMP for the first 6 weeks, they cannot make deductions in relation to that period, but can deduct from anything extra they give you for the remainder of your paid maternity leave. Once you move on to unpaid maternity leave, assuming you stay off that long, they will have to continue to provide vouchers but won't be able to make deductions.

Thanks flowery there aren't very many women that go off to have babies where I work so I feel like a bit of a guinea pig for them!

As a side note, does anybody know what period they use to calculate the average 90% earnings from?

Weeks 17-25 of your pregancy are used to calculate SMP.

Bbcessex, why do we women expect our childcare to be paid for....

Childcare is NOT just the responsibility of the mother. It really isn't.

And to the person Ho said that "girls" at her husband's company keep going off on maternity leave, for a number of reasons, I would hope they're women.

StealthPolarBear I think you are deliberately missing my point.
Of course childcare is a joint responsbility. However, as far as I'm aware, women are the only gender to go on Maternity Leave, therefore, the reference in this case is accurate.

I still stand by my point; It's great to have childcare vouchers for "free" during maternity leave - I'm sure no one is going to turn down up to £243 a month if offered.

However - for all those people "demanding it" and up in arms about it - It's a lucky break... I think the childcare vouchers were classed as a benefit for admin reasons, therefore it's a (mums) happy fluke, and an (employers) nightmare, and the longer people "grab", the more unlikely employers are to offer the scheme. I wouldn't.

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If I were a small business, I would no longer offer vouchers for specifically this reason.

Why should (we) women expect our childcare to still be paid directly out of our employer's pocket's whilst on maternity leave?